As it is explained by Johnny Depp, who plays Donnie Brasco in the movie "Donnie Brasco"

"Forget about it" is like, if you agree with someone, you know, like "Raquel Welch is one great piece of ass, forget about it." But then, if you disagree, like "A Lincoln is better than a Cadillac? Forget about it!" you know? But then, it's also like if something's the greatest thing in the world, like minga those peppers, "forget about it." But it's also like saying "Go to hell!" too. Like, you know, like "Hey Paulie, you got a one inch pecker!" and Paulie says "Forget about it!" And then, sometimes it just means forget about it.